The 'death of peak oil' has been much exaggerated, writes Paul Mobbs. Take out high-cost 'unconventional' oil and production peaked ten years ago, and even North America's fracking and tar sands boom has failed to open up new resources both big enough to make good the shortfall, and cheap enough to reward investors. We really do need to be thinking 'beyond petroleum'.

This is the cleft stick within today's global energy supply: too little 'cheap energy' to enable economic growth, too low a return on capital to allow investment in higher production.

"EIA's most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions... The DPR estimates include the first projected declines in crude oil production in these regions since publication of the DPR began in October 2013."

In the shale oil producing areas of Eagle Ford, Niobrara, and the Bakken, production had reached a peak and was beginning to decline. What the USEIA is not clear about is whether this is the result of recent economics, or some longer-term trend.

This message was echoed a few weeks later in the Post Carbon Institutes's new analysis of Marcellus shale production, along with a warning about the future prospects:

"Industry invariably drills its best prospects first, hence the cheapest gas is being exploited now. Infinite faith in technology cannot make up for the realities of geology. These realities are showing up now in the most productive counties."

In Britain, emulating the USA, we've been told that we have to go all out to realise the 'US shale energy revolution'. It has been sold to the public as a new economic Renaissance ... what went wrong?

Long before $147 oil and the resultant economic crash that followed, the book analysed the evidence for the peaking of various energy resources, and the economic problems which might result from the practical reality of these phenomena.

'Peak oil' - or the peaks of other resources such as copper or rare metals - is not equivalent to 'running out'. The 'peak' is the point in time when half the available non-renewable reserve has been extracted - somewhere between a half and two-fifths through the lifetime of the resource.

From that point on it gets progressively harder to maintain production. Supply begins to fall, and both the energy and resources expended to produce a given quantity of the resource begins to increase exponentially over time.

This effect is the result of the interaction of geology and economics:

Geology gives a natural distribution of resources - with a few large high-quality deposits, a slightly larger number of middling-quality deposits, and a lot of very small low-quality deposits.

Economics dictates we use the easiest to exploit and cheapest first, which means we use the biggest, easiest to access ones. Over time what's left gets progressively harder and more expensive to produce as we work through the 'stock' of the resource.

The difficulty is that when we're talking about essential industrial minerals and energy resources, tight supply and rising prices - like the trends operating across the decade of the 2000s - can destabilise the economy.

As billions poured into the banks, all the bankers could do in the midst of a recession was to lend to the few large industrial investment projects which were under-way - such as 'fracking' in the USA, or the housing market in Britain.

For the economic lobby fracking was a human-made miracle. It answered the criticisms of peak oil theory by alluding to a vast untapped resource of oil and gas that could be brought to the market by new technology and human ingenuity.

In late 2014 - when the first signs of an impending collapse in fracking, and the exaggeration of the available resources came to light - the arguments over the 'death of peak oil', which had been quiet for a year, were dragged from the economic lobby's closet.

Around this time I began watching the statistics on oil and gas production closely once more. And with the USEIA's recent announcement, the reality has become clearer.

The quiet reality of North American oil

Canada produces a lot of conventional and unconventional oil - a large proportion of which gets sent to the USA. This fact is used as a positive message by the tar sands lobby to promote their industry.

What that message misses is that the whole of the continent of North American acts as a single market - in part due to NAFTA.

Mexico used to supply a lot of oil to the USA too, but production in the Cantarell field peaked in 2003 and is now in decline. For the last few years all that those increases in Canadian production have done is to roughly keep pace with the decline of Mexico's production.

In the USA, yes they've produced a lot of new oil and gas from shale. What's equally significant is that, as a result of the economic downturn, they're also consuming 10% less oil than they were before the crash.

Within the North American energy system, the impacts of the US economic recession on consumption is every bit as important as all those fracking rigs. In the global context too, the recent Chinese economic slowdown is a major factor in OPEC having the ability to floor the price of oil, thereby curtailing unconventional sources of oil.

The figures are clear - we've peaked!

If we take the data from the BP Annual Statistical Review for 2014, global oil supply was higher than in any other previous year. Peak oil averted? - arguably not.

BP's figures include fracked shale oil, Canadian tar sands, and natural gas liquids from unconventional gas production. As outlined recently by the USEIA and Post Carbon Institute, shale oil is beginning to hit the limits of production. In Canada too, production is being constrained by a lack of new investment due to currently low prices.

The other major factor is that, even amongst conventional producers, all is not rosy. Six nations produce half the worlds oil, three of which have peaked conventional production; 14 produce 75%, six of which are arguably past their conventional oil peak.

For the last decade fracking and tar sands have produced enough oil to influence the global figure - but only by a few percent. Strip out that few percent of unconventional oil (let's ignore the gas liquids for now) and that small buffer evaporates.

Once shale production falls significantly, or Mexico or another key producer begins to hit the steeper part of their depletion curve, or just a few more oil producers reach their peak, production will fall more steeply - portending yet another global energy, then economic crisis.

Without the small contribution from unconventional oil, global oil production peaked in 2005, and has been on a very gradual downward trajectory ever since. This is the cleft stick within today's global energy supply: too little 'cheap energy' to enable economic growth, too low a return on capital to allow investment in higher production.

In terms of a definition of 'peak oil' which encompasses both its economic and geophysical nature - this is a situation which demonstrates the reality of oil's ecological limits.

Today, doubts over the future of unconventional oil make peak oil a reality.

If prices rise, won't fracking and tar sands make a comeback?

If supply falls, and prices rise, won't we just start the whole bandwagon over again? That depends upon the economic conditions the other side of the crisis.

During the early 2000s 'gas fracking' in the US arose under the lax credit arrangements which existed in the USA before the 2007/8 economic crash. After the 2008/9 crash most of those gas rigs were withdrawn and re-directed to oil production. What has fuelled 'oil fracking' since 2009 has been near-zero interest rates and the 'cheap' money created by quantitative easing.

Also, given what we know about unconventional fossil fuels today - their impacts upon the climate, and human health, and their unwholesome relationship with political power and academia - the public are in a far better position to resist any attempt to resurrect the industry.

The Age of Oil is winding down - it has been doing so since 2005. In a greenhouse gas constrained world, where the swift adaptation of our food system to climate change is arguably a higher priority than fuelling private cars or passenger air travel, there is no room for unconventional fossil fuels.

Of course the neoliberal economists who chuckled at the 'death of peak oil' will scream with rage! Peak oil hasn't just refused to die; it's alive and well and perturbing their economic models once more.

That's their own ideological problem. They will have to adapt their theories in the face of peak oil's statistical reality, or stand aside and allow ecological economists - who do internalise these factors - to begin guiding society on a new path.